Why Closing Out The Year Below $50,000 Could Be Bad For Bitcoin
December 09 2021 - 3:30PM
NEWSBTC
A lot of predictions had put the price of bitcoin at $100,000 by
the end of the year and although there are still some weeks left to
go, it does not look like these predictions will come to pass.
Bitcoin has however maintained a bullish trend despite price
crashes and massive liquidations rocking the digital asset in
recent times. Since analysts, and the crypto market in general, has
been so focused on the bullish future of the asset, there has not
been much attention paid to a low for the year. As the end of 2021
rolls around, it is important to not only look at the bullish
end-of-year predictions but also how the cryptocurrency might be
affected depending on the price bitcoin closes at. Related Reading
| Bitcoin Open Interest Takes Second Largest Dump Of 2021
Crypto analyst Justin Bennett addresses this in his latest issue of
the weekly newsletter. Bennett maps out the outlook for the digital
asset, as well as the implications of bitcoin closing out the year
below $50,000. Options Contracts Becoming Worthless Some of the
bitcoin options contracts are set to expire at the end of the year
and the profitability of these options contracts depend greatly on
what price BTC is when they expire. Since the crash, bitcoin has
struggled to maintain its value above $50,000 and this has not been
good for the options contracts. Bennett notes that a close below
$50,000 would see all of these contracts expire worthless, playing
into what he called the “max pain theory”. The crypto analyst is
not particularly confident in the digital asset’s ability to finish
the year above $50,000. He expressed that he expects the
consolidation in larger cap cryptocurrencies to continue through
the last month of the year. Bennett however notes that there is a
wide range for bitcoin due to the December 4th candle. This means
that anywhere between $42,000 and $53,000 is possible going
forward, providing a massive margin for the digital asset. BTC
price continues downtrend | Source: BTCUSD on TradingView.com
Bitcoin Volume Is Concerning Bennett also points to the lack of
volume in the cryptocurrency. One thing is to start a rally or a
breakout, but the other thing is to get enough volume to match that
breakout. Otherwise, a rally would not be successful. Related
Reading | Number Of Bitcoin Lightning Network Nodes Jumps 23%
In Three Months “If we’re to see Bitcoin and the rest of the crypto
market breakout later this month or even January, we need to see
volume to match the price increase,” said Bennett. “Without volume,
any rally or even breakout is more likely to fail.” As bitcoin
continues to consolidate following a $53,000 test, the market is
quietly waiting for more institutional money to pump into the
market. Currently, Bennett has put the bitcoin key support at
$49,000. “Below that is the April trend line near $46,000,” Bennett
notes. Featured image from Bitcoin News, chart from TradingView.com
Rally (COIN:RLYUSD)
Historical Stock Chart
From Nov 2024 to Dec 2024
Rally (COIN:RLYUSD)
Historical Stock Chart
From Dec 2023 to Dec 2024
Real-Time news about Rally (Cryptocurrency): 0 recent articles
More Rally News Articles